Figures from Pegasus Insight reveal that landlords have average total borrowing of £714,000 and an average of six-and-a-half individual loans spread across two lenders.
Most landlords rely on intermediaries when arranging BTL finance to negotiate the complexity of their portfolios.
Mark Long, managing director and founder of Pegasus Insight, said: “What stands out from the data is the degree to which landlord borrowing is structured across multiple products and lenders. For many, managing finance is no longer a one-off decision, but an ongoing process.
“That creates both opportunity and exposure for borrowers. When financing is structured across several products, decisions in one part of the portfolio can have knock-on effects elsewhere, particularly around refinancing and cash flow timing.
“It also reinforces the importance of professional mortgage advice. As portfolios become more layered, landlords need a clear view across their borrowing, rather than treating each mortgage in isolation.”
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Smaller landlords exiting
The large number of properties per landlord highlights the extent to which smaller landlords are exiting the market due to higher tax burdens and new legislation.
Studies in recent years have indicated that those with smaller portfolios were most likely to be considering an exit, leaving a greater proportion of landlords with larger portfolios.
Pegasus Insight recently found that the profitability of renting properties to tenants was dropping, with 85% of landlords saying their lettings activity was profitable, which was down four percentage points on the previous quarter.
There was also a 2% rise in landlords reporting a financial loss and a fall in rental yields.
Houses in multiple occupation (HMOs) – more likely to be held by landlords with a number of properties – buck the trend on profitability, generating higher-than-average yields of 7.3%.
By contrast, landlords with standard property portfolios reported being more exposed to the costs of letting rentals.
